Anglo American (AAL) was hit by production suspensions in South Africa in the first half and did not have the copper or iron ore volume to rescue its earnings. Fellow majors BHP (BHP) and Rio Tinto (RIO) have had strong years so far because of the iron ore price.
Anglo’s underlying cash profits (Ebitda) for the six months to 30 June were $3.4bn (£2.6bn), down 39 per cent on last year. This weakness has flowed to the interim dividend, which is down by more than half compared to 2019, at 28c.
Iron ore and copper cash profits were down 10 per cent and 11 per cent, respectively, year on year.
On top of the platinum group metals (PGM) production issues, the 85-per-cent-owned De Beers division saw its revenue fall by more than half as both the volume of sales tumbled and the already-weak diamond price fell further. The division’s contribution to underlying cash profits was $2m, compared to $518m last year. Coal earnings also declined significantly, from almost $1bn to just $23m.
Chief executive Mark Cutifani said Anglo was back to 90 per cent operational capacity by the end of June. The company’s new mines remain on track as well, with the Quellaveco copper project in Peru still set for production in 2022 despite Covid-19-related delays.
Consensus forecasts compiled by FactSet put full-year cash profits at $7.8bn, 22 per cent down on 2019.
| ANGLO AMERICAN (AAL) | ||||
| ORD PRICE: | 1,884p | MARKET VALUE: | £ 23.2bn | |
| TOUCH: | 1,883-1,884p | 12-MONTH HIGH: | 2,266p | LOW: 1,018p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 1,853¢ | NET DEBT: | 26% | |
| Half-year to 30 Jun | Turnover ($bn) | Pre-tax profit ($bn) | Earnings per share (¢) | Dividend per share (¢) |
| 2019 | 14.8 | 3.38 | 148 | 62 |
| 2020 | 12.5 | 1.55 | 38 | 28 |
| % change | -16 | -54 | -74 | -55 |
| Ex-div: | 20 Aug | |||
| Payment: | 25 Sep | |||
| £1=$1.30 | ||||
